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'Fiscal cliff' plan clears House with GOP divided

In their party's first vote for taxes in two decades, House Speaker John Boehner and Rep. Paul Ryan join a minority of Republicans to help pass the agreement. President Obama will sign it soon.

January 01, 2013|By Lisa Mascaro and Kathleen Hennessey, Washington Bureau
  • President Obama, with Vice President Joe Biden, said the fiscal compromise that passed was “just one step in the broader effort” to reduce the deficit.
President Obama, with Vice President Joe Biden, said the fiscal compromise… (Charles Dharapak, Associated…)

WASHINGTON — The House voted Tuesday to roll back income tax increases on the vast majority of Americans, finalizing a deal on the so-called fiscal cliff after weeks of gridlock.

The approval, in a session that stretched late into the New Year's holiday, came after hours of closed-door debate among Republicans, with conservatives threatening to derail a bill that had overwhelmingly passed the Senate in the early hours of the morning.

The final tally, 257 to 167, included support from 172 of the chamber's Democrats and just 85 of the majority Republicans, far fewer than half. The vote divided House GOP leaders, with the second- and third-ranking Republicans, Eric Cantor of Virginia and Kevin McCarthy of Bakersfield, among the 151 in their party voting no. Speaker John A. Boehner (R-Ohio), casting a rare vote, and Rep. Paul D. Ryan (R-Wis.), the House Budget Committee chairman and 2012 vice presidential nominee, voted in favor.

Once signed by President Obama, the bill will allow taxes to rise for those with incomes above $400,000 for individuals and $450,000 for couples. It also will renew tax credits aimed at low-income households and college students, extend unemployment benefits, delay automatic spending cuts in defense and other government programs for two months, and resolve several other issues that Congress had left hanging.

QUIZ: How much do you know about the fiscal cliff?

What it will not do is match the ambitious goals set by Obama and Boehner for a "grand bargain" that would put the government on a path to a balanced budget. Instead, the compromise sets up another deadline two months hence for Congress to once again deal with the government's budget.

That debate seems likely to be at least as bitter as this one. In the closing minutes of the House session, Democrats disputed Republican claims that the deal set a new permanent level of tax revenue for the federal government. Democratic lawmakers noted the president had vowed to seek more new tax revenue in the next round. Republicans countered that overspending, not under-taxation, was the cause of the government's problems.

Shortly after the vote, Obama hailed the passage as part of the balanced approach to deficit reduction he had sought, noting that it fulfilled his campaign pledge to raise taxes on the nation's wealthiest citizens. Obama, who will sign the measure in coming days, took pains to praise leaders of both parties who corralled votes.

Speaking at the White House before leaving to rejoin his family on vacation in Hawaii, Obama called the compromise "just one step in the broader effort" to reduce the deficit, and specifically pointed to spending on Medicare for an aging population as the major force driving the red ink.

"I am very open to compromise," he said. But, he added, "we can't simply cut our way to prosperity." Solving the problem will require "further reforms to our tax code" to eliminate unjustified loopholes, he said.

PHOTOS: Scenes from the fiscal cliff

Boehner, in a statement, said he would press for "significant spending cuts and reforms to the entitlement programs that are driving our country deeper and deeper into debt."

The deal, largely negotiated by Vice President Joe Biden and Senate Republican leader Mitch McConnell (R-Ky.), blocked income tax increases that were to go into effect at the turn of the year for 99% of American households. It passed the Senate by a lopsided 89-8 vote, engineered by McConnell and Senate Majority Leader Harry Reid (D-Nev.) to put as much pressure as possible on the House to follow suit.

But as House Republicans gathered early on the afternoon of New Year's Day for the first of two private caucus meetings, many vowed to resist. The bill could be amended and sent back to the Senate, they said.

The mood did not last.

In the evening, Republicans held a second caucus meeting. This time, take-out Chinese food replaced sandwiches, and resignation subbed for defiance.

Several Republicans said afterward they feared that, if the bill failed and taxes went up on nearly everyone in the country, their party would take the blame.

"You do have to know when to hold 'em and when to fold 'em," said Rep. Steven C. LaTourette (R-Ohio), who is retiring this week, as he emerged from the meeting. "We've been beaten [in] this fight."

Even so, the decision by Boehner to bring the bill to a vote without the support of a majority of his caucus — the usual standard — rankled many Republicans. The compromise, they complained, did virtually nothing to cut spending. And while it kept the low tax rates of the President George W. Bush era for most Americans, the tax hikes it did contain were anathema to lawmakers who had sworn to oppose any increase. Passage of the bill in the Senate marked the first time in two decades that any Republican in Congress had voted for an income tax increase.

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